BP discovery may hold 3 billion barrels

Published 7:00 pm, Saturday, September 5, 2009

London oil major BP announced a major discovery in the Gulf of Mexico that may contain more than 3 billion barrels of crude oil, making it among the biggest finds ever in the region.

The company's Tiber prospect was discovered after BP drilled a well to a depth of 35,055 feet — which BP calls a record for the oil and gas industry — in a deep water site known as Keathley Canyon about 250 miles southeast of Houston.

The well marks the latest major discovery in an outer region of the U.S. Gulf referred to as the Lower Tertiary trend, which is thought to hold massive undiscovered oil reserves.

"It proves there's a lot of oil not yet found in the Gulf of Mexico," said Matt Pickard, analyst with Quest Offshore Resources in Sugar Land.

In recent years, BP, Chevron Corp., Brazil's Petrobras and other oil companies have also discovered huge oil fields in the Lower Tertiary, an ancient rockbed that may be 300 miles wide in the deep waters off the Texas and Louisiana coasts.

Based on preliminary testing, BP's Tiber prospect appears to be on par with the size of the company's Kaskida field, another Lower Tertiary find estimated to hold more than 3 billion barrels of oil, BP spokesman Daren J. Beaudo said.

The initial well was drilled by a rig owned by Transocean, a Swiss-based drilling contractor with major operations in Houston, he said.

BP is the largest producer of oil and gas in the Gulf of Mexico with net production more than 400,000 barrels of oil equivalent per day and is currently the largest acreage holder in the Lower Tertiary trend.

The company did not estimate how soon it could begin producing oil from Tiber, which is 62 percent owned by BP, 20 percent owned by Petrobras and 18 percent owned by Houston's ConocoPhillips.

But Pickard said it could be as long as a decade before the field is developed, given the technical challenges and costs associated with extracting oil from the ultra-deep water.